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Edition: U.S. Article Comments (3) Slideshow Video Save Email Print Reprints Most Popular Most Shared Scherzinger wins "Dancing With the Stars" 1:34am EDT BP had warning signs before Gulf blast: panel 12:26am EDT Civil fine in Gulf spill could be $4,300 barrel 25 May 2010 BP's handle on Gulf spill pivots on "top kill" | Video 2:03am EDT Crystal storms back, Lee nervous in "Idol" finale 25 May 2010 Obama tells military: prepare for North Korea aggression 24 May 2010 Seoul shares turn flat as foreign selling ensues 25 May 2010 UPDATE 6-Obama to send troops, bolster border security 25 May 2010 North Korea threatens to cut last link with South | Video 3:14am EDT Euro down as debt fears linger | Video 3:11am EDT Civil fine in Gulf spill could be $4,300 barrel 25 May 2010 Microsoft Xbox, phone chief out as unit struggles 25 May 2010 BP had warning signs before Gulf blast: panel 12:26am EDT Dell's Streak readies for battle with iPad 25 May 2010 Scherzinger wins "Dancing With the Stars" 1:34am EDT BP-owned Alaska oil pipeline shut after spill 25 May 2010 U.S. claims on copyright piracy "groundless": China 25 May 2010 Mexico City cyclists ride nude in anti-car protest 07 Jun 2008 Is aging a disease? 20 May 2010 U.S. reverses stance on treaty to regulate arms trade 14 Oct 2009 North Korea threatens to cut last link with South Christine Kim and Arshad Mohammed SEOUL Wed May 26, 2010 3:14am EDT Factboxes Factbox: South Korea's industrial park in the North Tue, May 25 2010 Factbox: International sanctions against N. Korea Mon, May 24 2010 Related News Q+A: How serious is the crisis on the Korean peninsula? Tue, May 25 2010 Q+A: Why a "state of war" still exists on Korean peninsula Tue, May 25 2010 Scenarios: North Korea again at centre of regional tension 3:14am EDT Related Video North Korea cuts ties with South Tue, May 25 2010 UN investigates S. Korea ship claims North Korea denounces South South Korea punishes North < 1 / 9 > View Full Size SEOUL (Reuters) - North Korea threatened on Wednesday to close the last road link with the South if Seoul goes ahead with anti-Pyongyang propaganda broadcasts, as Washington pressured China to help persuade the North to change its ways. World | China | North Korea The mounting antagonism between the two Koreas has shaken investors, uncertain how far they are ready to take their bitter rivalry after the South accused the North of torpedoing one of its warships. But after a sharp drop in shares and the local currency on Tuesday, Seoul's financial markets looked stable and the government said it was ready to step in if things looked to be getting out of control. "The South Korean puppet war-like forces would be well advised to act with discretion, bearing deep in mind that such measures of the KPA (army) will not end in an empty talk," North Korea's KCNA news agency quoted a top official as saying. Washington is looking for ways to avoid the issue collapsing into conflict and U.S. Secretary of State Hillary Clinton called on Beijing to help to coax the North into changing course. "There is a different path for North Korea and we believe it's in everyone's interest, including China, to make a persuasive case for North Korea to change direction," she told reporters in Seoul. China, which almost single-handedly props up the North Korean government and its destitute economy, again called for calm and dialogue. Beijing has refused to give its backing to an international investigation that last week concluded North Korea in March sank the South Korean Cheonan corvette, killing 46 sailors. China is certain to block attempts to impose new sanctions on its ally which means the United States may have to accept no more than a carefully worded rap over the knuckles for Pyongyang. Clinton said that the crisis brought on by the North's sinking of a South Korean warship required a strong but measured response and said Washington was considering additional options to hold Pyongyang accountable. "There is the immediate crisis caused by the sinking of the naval vessel which requires a strong but measured response, but there is a longer-term challenge of changing the direction of North Korea." SEVERING TIES The North on Tuesday announced it was severing all ties with the South, which has announced its own set of measures against Pyongyang for sinking the Cheonan. Those include resuming, after a six-year lull, the setting up of speakers near the border to broadcast anti-government propaganda and send messages across by balloon. So far, though, the reclusive state is allowing South Korean workers to enter a joint industrial park that is a lucrative source of income for the Pyongyang government. The move suggests the isolated North is being careful not to take steps that will cause it real material damage. But if it does cut the road link to the Kaesong industrial park, it will be unable to function. Analysts say both Koreas, who have never repeated the open conflict of the 1950-53 Korean War, were unlikely to let their current hostility turn to war. Apart from Kaesong, there is little economic relationship left between the two, their ties almost frozen since the South's conservative President Lee Myung-bak took office in 2008. "North Korea is not closing up Kaesong immediately because it is saving the cards it needs in order to play the game," said Jang Cheol-hyeon, researcher at the Institute for National Security Strategy. By paying the workers' wages directly to Pyongyang, Kaesong is one of the few major legitimate income sources for the North's secretive leaders, worth tens of millions of dollars a year. (Additional reporting by Jonathan Thatcher, Jack Kim, Christine Kim, Jungyoung Park and Choonsik Yoo; Editing by Jeremy Laurence and Alex Richardson) World China North Korea Comments See All Comments (3) | Post Comment May 26, 2010 1:44am EDT 50 years ago the United States would go to war today China owns us and we do nothing. benzschaw Report As Abusive May 26, 2010 2:15am EDT 50 years ago the United Stated did go to war with China over Korea. And wasn’t that a brilliant move. North Korea denies they sunk the South Koreans ship and no one has any conclusive proof whatsoever that they did. And yet, as usual, there’s a legion of sexually frustrated morons pushing for war. RandomName Report As Abusive May 26, 2010 2:56am EDT Why would anyone believe North Korea. The eveidence is overwhelming. I pity the North Korean people who are ruled by a bunch a dangerous thugs. China holds the trumpcard. Lam al43 Report As Abusive See All Comments (3) Add a Comment *We welcome comments that advance the story directly or with relevant tangential information. We try to block comments that use offensive language or appear to be spam and review comments frequently to ensure they meet our standards. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. © Copyright 2010 Thomson Reuters Editorial Editions: Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom United States Reuters Contact Us Advertise With Us Help Journalism Handbook Archive Site Index Video Index Analyst Research Mobile Newsletters RSS Podcasts Widgets Your View Labs Thomson Reuters Copyright Disclaimer Privacy Professional Products Professional Products Support Financial Products About Thomson Reuters Careers Online Products Acquisitions Monthly Buyouts Venture Capital Journal International Financing Review Project Finance International PEhub.com PE Week Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. 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